For example, it can be said that most of the employed people of all the societies built around Delhi-NCR have fulfilled their dream of owning a house by buying a flat. There would be very few people who would have bought a house by paying cash. Most of the people must have made their dream of a house or flat come true by taking a loan. This thing is applicable not only for Delhi and its surrounding but also for all the metros and big cities of the country.
only the wise survive
But today we are not talking about realizing the dream of people’s house. We are talking about people getting emotional when they are close to realizing a dream. They are so eager for it that many times they get trapped in the vicious circle of the loan giving institutions. There are only a few knowledgeable people who can save themselves from this vicious circle of banks or financial institutions. Today we are going to talk about this vicious circle and will try to explain to you what you should do. How do you get trapped in this type of trap and do not put unnecessary burden on your pocket for a long time.
bank’s purpose is to make money
Banks and financial institutions have only one objective that how to earn maximum money from the customer. They work less for your interest and more for their own interest. Your interest is only that how you take your steps with the information.
Banks sell insurance policies
Bank gives you loan. This is right. The bank now sells you an insurance policy along with the loan. This is a bit worth considering. The bank gives you loan and charges interest on it. The bank gives you term insurance so that it can take care of its loan. It is a different matter that the bank also takes a guarantor for the security of the loan. As per the order of the court, it is also clear that along with the borrower, his guarantor is also responsible for repaying the loan.
error occurs here
Bank also prepares another security for all these things. He guarantees double protection of his money with term insurance. Come on, it’s okay till now. But the bank does not give you correct and proper information here. Or, due to their emotionality and eagerness, the borrowers are usually unable to pay attention to this matter.
Here the bank cleverly adds the amount of insurance to the amount of your loan and also makes you understand that you do not have to do anything for this policy. We will add just a few Rs 100 to the loan premium which will be gradually repaid along with the loan EMIs. And it also happens that we all accept it quickly. Because we all see that with only a few hundred rupees the premium of our policy will be paid. We will not have to worry about it separately. Nor will there be any separate effort.
this is how the game goes
But this is where the whole game takes place. Which we are going to explain today. Suppose you have taken a loan of 20 lakhs from the bank. Along with this, the bank gives you an insurance policy so that it can protect its loan. The cost of the single premium policy is only 25 to 30 thousand rupees. The bank adds up to Rs 200-300 per month to your EMI for this type of policy. What the bank does is that by adding the amount of this premium to your principal amount, it gives you a loan. Due to this, if this loan also becomes 20 years old. Means you are giving 3600 rupees for a year according to 300 per month, which becomes 36 thousand in 10 years. And 72 thousand in 20 years. The thing to note is that it is also deducted like a home loan. Here also the bank first charges interest and then reduces the principal amount.
what do experts say
Pankaj Mathpal of Optima Money, a financial expert, told that banks often charge more interest for the premium of this type of policy than the home loan interest. Usually it is one percent more. They say that even if we assume that banks do not charge much premium, it is still a loss-making deal.
Mathpal explains that your liability for the bank is their asset. As long as you keep paying the EMI, this charge will continue. It would be good if the bank separates the insurance premium but it does not happen. Banks do not guide the customers properly here.
Mathpal says that it is wise to take insurance. It will be better if you take a regular premium policy. Better than single premium. At the same time, it is not necessary that you buy the policy through the bank itself because you can get a policy with cheaper premium by finding it from other places in the market.
Also read – Want to repay home loan quickly, know these 4 easy formulas